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Bank account switching reform calls

Bank account switching reform calls

5 min read

April 12, 2011

Obstacles that get in the way of consumers trying to switch their bank account have been blamed, in part, for a downturn in competition within the banking sector.

The Independent Commission on Banking said that measures should be put in place to make the process of switching bank accounts go ahead more smoothly in order to stimulate more competition between the banks. These could include a set time period, possibly of seven working days, during which banks would have to complete the process.

It was suggested that a redirection system could be created over the next few years which would enable direct debits and credits from old accounts to be transferred to new ones with minimal fuss.

One of the major stumbling blocks mentioned by the commission was the fact that consumers can't change their bank account number when switching provider. It was suggested that this could be scrapped to enable them to make changes more freely.

It said this measure had been rejected in the past as being too costly but it should be reconsidered if no other solutions appeared to be effective.

The commission said competition between banks had been blunted by the actual and perceived difficulties people faced in switching their current account to another provider.